Entravision's Spectrum Puts Smadex in the Bargain Bin

Entravision Communications lost Meta as a client in 2024. Meta had accounted for roughly 40% of Entravision's revenue. The stock dropped to $2.04 a share. The company responded by buying Smadex, an ad-tech platform, for about $40 million.

The loss was severe. Revenue plunged more than half after the Meta business disappeared. Entravision cut costs, sold some radio stations, and focused on digital. Smadex became the centerpiece. It is a programmatic ad platform that helps brands buy targeted inventory across mobile apps and connected TV. The deal closed in late 2024.

The Seeking Alpha analyst who covered the stock in 2024 argued that the market was mispricing Entravision. His thesis: the UHF spectrum owned by Entravision's 45 TV stations is worth more than the company's entire market cap. Those stations sit in large Hispanic markets like Los Angeles, Miami, and New York. Mobile carriers need that spectrum for 5G. The analyst estimated that a lease or sale of just a portion could be worth $200 million to $300 million. At the time of his article, Entravision's enterprise value was about $150 million. If the spectrum is worth that much, the rest of the business – Smadex plus the radio stations – is priced at zero or negative.

Smadex itself is growing. In the first quarter after acquisition, it generated about $15 million in revenue, according to the company. The growth rate was above 30% year over year. The analyst wrote that Smadex could reach $80 million in annual revenue within three years if it captures share in the Hispanic ad market. Entravision has deep relationships with Spanish-language media buyers, a distribution edge that competitors lack.

The risks are real. Smadex competes with The Trade Desk, Magnite, and Google. The programmatic ad market is cyclical. A recession would slow growth. Spectrum monetization is uncertain. The FCC must approve any lease or sale, and the timeline is months or years. Entravision also carries debt from the Smadex acquisition, about $25 million. Interest rates matter.

The analyst's math stays straightforward. If Smadex hits $80 million in revenue by 2027 with 20% margins, the platform alone would be worth $160 million at a 10x multiple. Add $200 million for spectrum and the total reaches $360 million. The current market cap is around $120 million. The downside case: Smadex stalls and spectrum never materializes. In that scenario, the stock could fall back to $1.50.

The next catalyst is the company's second-quarter earnings, expected in early August. That report will show Smadex's first full-quarter contribution and any progress on spectrum talks. The analyst held a long position in the stock.